Demo accounts: what they teach and where they lie

A demo feed is built to show a clean market. Prices tick at even intervals. The spread stays near a fixed number. On USD/INR around 83.2500, the screen may show 83.2495 to 83.2505, a spread of 10 points, which is 1 pip. That tidy picture comes from a simulator, not from a live order book. A live feed pulls prices from banks and other participants. Those prices jump when news lands, and the spread can widen without warning.

The arithmetic on a demo is still correct. One standard lot of USD/INR moves ₹10 for each pip. If the demo shows a 20-pip rise from 83.2500 to 83.4500, the profit shown is 20 × ₹10 = ₹200. That figure is honest. What the demo does not show is that the same 20-pip move on a live account might be filled in several parts, at prices that are not the ones you clicked.

A demo also lets you place an order at any moment, including during quiet hours. A live account may have a minimum size, a maximum size, or a cut-off time around major data releases. These limits are not secrets. They sit in the contract specification, which is a document your broker must give you. Read it before you compare demo results with live results, because the two sets of numbers are produced under different rules.

When you click buy on a demo, the platform fills you at the price on screen. That is a promise the demo can keep because no real money moves. A live order goes to a broker, who passes it to a liquidity provider or fills it from the broker's own book. In a fast market, the price can move between your click and the fill. The difference is slippage. Slippage can be positive or negative, but on a demo it is always zero.

A second difference is the requote. On a live account, the broker may reject your requested price and offer a new one. You then choose whether to accept. A demo rarely shows this because the simulator has no reason to protect itself. Requotes are more common when the market is thin, such as late on a Friday or during a holiday. They are not a sign that the broker is unfair. They are a sign that the price you asked for no longer exists.

A third difference is the queue. On a demo, your order is the only order. On a live account, thousands of orders may sit at the same price. If you are at the back of the queue, your order may not fill at all when the price touches that level. The demo will show a fill. This gap matters most for limit orders and stop orders, which are the tools many beginners use to control risk.

The useful exercise is not to run a demo for months and then switch. It is to run a small live account beside the demo and compare the same trade. Place one standard lot on the demo and one micro lot on the live account, at the same moment, on USD/INR. A micro lot is one tenth of a standard lot, so one pip is ₹1. Write down the price you saw, the price you got, and the difference in pips.

Suppose the demo fills at 83.2500 and the live fill is 83.2503. The difference is 3 pips. On one standard lot that is 3 × ₹10 = ₹30. On one micro lot it is 3 × ₹1 = ₹3. Do this ten times and you have a small table. The table tells you the average slippage for your broker at the hours you trade. It does not tell you what will happen tomorrow, but it stops you from assuming the demo fill is normal.

You should also note the costs that sit outside the fill price. The spread is the difference between the buy price and the sell price. Commission is a separate charge on some accounts. Swap is a daily charge for holding a position overnight. These vary between brokers, and they can change. Check the contract specification for the instrument you trade. Add these costs to your table, because a demo often shows the spread but not the commission or the swap.